Constellation Software Inc. (CSU.TO) Buy,…

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Constellation Software Inc. (CSU.TO)

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2,969.32

+67.76 (2.34%)

as of Jun 5, 2026, 8:00:00 pm Market Open.

339 watching

TOP PICK

You want software companies with good revenues streams and good balance sheets. About 69% of their revenue is recurring. They have done good acquisition and have ammunition to do more in this distressed environment. He thinks earnings will grow by over 20% going forward. Yield 0.42% (Analysts’ price target is $1566.22)

WAIT

He once owned it, did well, and took profits in late-2019. Will be interesting to see how CSU maneuvers the next few months. They acquire lucrative runway companies at a discount--and those are now trading at discount. He expects CSU to buy in coming months. An interesting play, but a little early to enter CSU.

HOLD

One of his favorites. Volatility is common with this one. They are a vertical market software company, having very specific software for niche customers. This makes it very hard to compete against them. The contracts tend to be higher margin as well. The concern people have is that now they are as big as they are, can they keep the runway going? He thinks so.

HOLD

He does not own this one. He sold it about $120 ago and he kicks himself for it. Their business thesis is about business acquisitions and when he say them slowing down on that front he decided to take profit. A holder may consider some option strategies like covered calls.

COMMENT

CGI has been on a monster tear. There are rare non-commodity, utility or financial companies. There is a premium on these. They missed on a quarter and organic growth is slowing. It is an acquisition story, however. He would prefer Constellation Software that they own.

BUY ON WEAKNESS

They are probably one of the best in making acquisitions in Canada and in the US. This stock has been consolidating and he thinks there could be a re-acceleration up. You would have a chance to buy it now before it moves up.

PAST TOP PICK

(A Top Pick Feb 20/19, Up 25%) It is slow and steady. They make good acquisitions and they have never issued new stock. He likes it a lot.

TOP PICK

This one had an excellent run. It is one of the two strongest stocks on the TSX over the last 10 years. Their CEO is considered one of the best capital allocators in the world, not just in Canada. This is in his view a forever-hold stock. (Analysts’ price target is $1423.00)

PAST TOP PICK

(A Top Pick Dec 28/18, Up 52%) Really likes infotech. CSU is now consolidating, a little choppy, but it remains a core holding. He expects near-time weakness along with the overall market in January.

COMMENT

It’s a surprising story that has gone up. An expensive stock in terms of overall price. However, it is a project-by-project company so as long as the economics of the internet continues to grow, they will be fine. A good acquirer with positive results that will continue to show capital appreciation.

BUY ON WEAKNESS

Tremendous managers who acquire well and have a strong business strategy. More acquisitions to come. They deploy capital well at high rates of return. Buy on any weakness. This won't slow down; growth to come. A core long-term holding.

BUY ON WEAKNESS

They pulled back today, which happens time to time. Their business is so diverse, so he's not worried. He would buy this on a downturn. They invest their free cash flow well. They've had a great run-up.

HOLD

A perfect medium term hold and he owns a 2% holding in his portfolio. They acquire software startups and hold them for the long term. They have acquired of 260 startups. Their 10 year return on capital is 32% annually. His price target is $1425.

COMMENT

Constantly acquiring. Great Canadian name. Margins are very strong, but some are concerned with the organic growth. They have cash, and he'd say M&A will pick up next year. Complementary US name is Roper Technologies.

TOP PICK

A company that grows by acquisition. A $30B market cap company that grew free cash flow by 42% yoy. 16% increase in sales. Their return on capital is good and we could see 11% upside. (Analysts’ price target is $1423.00)

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Constellation Software Inc. (CSU.TO)